Off the Record: Small business owners left singing the blues

January 12, 2004|By Jim Grisso, Publisher

Seldom do we consider a double-digit increase in the cost of anything good news. But it is when you look at the 2004 health insurance rate increase brought to you by Blue Cross/Blue Shield of Michigan.

Like one guy said: "What we're celebrating is the decrease in the increase." Whoopee!

In the past five years, the Gaylord Herald Times hasn't seen an annual increase in Blue Cross rates under 20 percent. Last year, it was 35 percent.

When I saw a headline in a downstate newspaper late last year that Blue Cross rates would increase about 10 or 11 percent in 2004, I could have kissed Rick Cole. He's an acquaintance of mine who is senior vice president of the Blues. (Sorry, Rick, I didn't mean to get carried away.)

My uncontrollable joy subsided late last month when I received my official rate notification from Blue Cross. Oh, there was still some good news: one person premiums for us increased only 6.5 percent; two-people 12 percent. But family premiums jumped 18.5 percent.

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Until this year, Blue Cross hit us with a flat increase across the board, whether it be one person, two or family. They layered the increases this year. Playing the old percentage game.

I can see the rationale: a family of three or more files more health care claims than a single person.

There could be more good news on the way. New legislation that took effect Jan. 1 actually kicks in April 1, according to Blue Cross. It's somewhat complicated, but essentially tightens the controls.

"Blue Cross strongly believes market reform legislation will help the small business health insurance market in the state and will bring Michigan more in line with other states," said one Blues officials.

Blue Cross spends 9 percent on administration and the balance of 91 percent goes to claims for medical expenses. The 9 percent for administration is among the lowest in the country, Blue says.

Blue Cross, a nonprofit business, is between a rock and a hard place. Medical care costs continue to increase dramatically.

The Blues point out that rates have increased because Blue Cross members continue to use benefits over and above the premiums they charge. An aging population that expects the best medical services possible has a huge impact. I speak with first-hand experience.

My personal experience with Blue Cross has been good. The same holds true for servicing of claims for our employees. I've looked into other plans, and I can tell you the grass isn't necessarily greener once you thoroughly examine rate structures and some of the fine print.

One thing is sure: they've got to get a tighter grip on health care costs, or small businesses like ours and others out there won't be able to survive. We've had to tighten our belt in many areas, including downsizing our health care benefit plan. The company and employees have made major sacrifices.

Health care insurance is a huge benefit.

But we can't stand to see it grow too much more.

- Jim Grisso is publisher of the Gaylord Herald Times. You may write him at PO Box 598, Gaylord, MI 49734, or e-mail him at jim@gaylordheraldtimes.com